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Colorado Senate Rejects Bill Barring Rent-Setting Algorithms

By  |  May 2, 2024
Should We Be Concerned That Data And Algorithms Will Soften Competition?

In a contentious session on Wednesday, the Colorado Senate voted against a bill aimed at prohibiting landlords from utilizing algorithms to set rent prices. The demise of House Bill 1057 occurred after a coalition of moderate Democrats aligned with Republicans to oppose a more stringent version of the legislation, as reported by The Denver Post.

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    The focal point of the dispute revolved around an adopted amendment, which proponents of the bill alleged had been crafted by a software company lobbying against the proposed legislation.

    Senator Julie Gonzales, a Denver Democrat and one of the sponsors of the bill, expressed gratitude towards colleagues who supported renters. However, Gonzales criticized fellow Democrats for siding with a corporation currently under investigation for alleged price-fixing, rather than with Colorado residents grappling with the housing crisis.

    Advocates of the bill framed it as a necessary measure to prevent property owners and landlords from using algorithms to engage in collusion and artificially inflate rent prices. RealPage, a software developer implicated in a federal probe regarding its purported involvement in price-fixing activities among property owners, was a primary target of the legislation.

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    A ProPublica investigation in 2022 revealed that thousands of clients utilize RealPage’s software, with company officials acknowledging its role in driving up rental rates. Additionally, RealPage faces a class-action lawsuit in Colorado, according to The Denver Post.

    Following its passage in the House in early March, the bill proceeded to the Senate. However, discord over an amendment introduced in the Senate underscored tensions between the more progressive House and the comparatively moderate Senate.

    The bill ultimately failed by a narrow one-vote margin on Wednesday, reflecting the deep-seated divisions within the Democratic party. The disagreements also prompted heated exchanges between chambers.

    Last week, Senator Joann Ginal, a Fort Collins Democrat, proposed an amendment on the Senate floor permitting the use of rent-setting algorithms, provided that the data utilized was publicly available. This version of the bill subsequently passed in the Senate.

    Speaking to The Denver Post on Tuesday, Ginal defended the amendment, asserting that individuals should have the freedom to utilize apps and algorithms they have purchased. She maintained that the allegations against RealPage remain unproven, emphasizing the importance of awaiting the outcome of ongoing legal proceedings and investigations.

    In response to the Senate’s alterations, Denver Democratic Representatives Javier Mabrey and Steven Woodrow, the bill’s sponsors in the House, rejected the changes, arguing that they undermined the bill’s original intent.

    Source: Denver Post